U.S. SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                   FORM 10-KSB/A
                                (Amendment No. 1)
(Mark One)

[ X ]  Annual report under Section 13 or 15(d) of the Securities
       Exchange Act of 1934

                    For the fiscal year ended March 29, 2002

[   ]  Transition report under Section 13 or 15(d) of the Securities
       Exchange Act of 1934

             For the transition period from __________ to__________

                          Commission file number 0-5278
                                                 ------

                                 IEH CORPORATION
           ----------------------------------------------------------
                 (Name of Small Business Issuer in Its Charter)


          New York                                           13-5549348
--------------------------------                        -------------------
(State or Other Jurisdiction of                         (I.R.S. Employer
Incorporation or Organization)                           Identification No.)


140 58th Street, Suite 8E, Brooklyn, New York                      11220
----------------------------------------------                  ----------
(Address of Principal Executive Offices)                        (Zip Code)


                                 (718) 492-9673
                 -----------------------------------------------
                (Issuer's Telephone Number, Including Area Code)


Securities registered under Section 12(b) of the Exchange Act:


Title of each Class                Name of Each Exchange on Which Registered
       None                                          None

Securities registered under Section 12(g) of the Exchange Act:

                          Common Stock, $.01 Par Value
                             ----------------------
                                (Title of Class)


                                        1
<PAGE>

     Indicated by check mark whether the Registrant: (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Exchange Act during the
preceding 12 months (or for such shorter period that the Registrant was required
to file such reports),and (2) has been subject to such filing requirements for
past 90 days.

                       Yes   [ X ]                    No  [   ]

     Indicate by check mark if disclosure of delinquent filers in response to
Item 405 of Regulation S- B is not contained in this form, and will not be
contained, to the best of registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form 10-KSB
or any amendment to this Form 10-KSB.

                       Yes   [ X ]                    No  [   ]

     The Registrant's revenues for its most recent fiscal year ended March 29,
2002 were $4,338,012.

     On June 26, 2002, the aggregate market value of the voting stock of
Registrant held by non- affiliates of Registrant (consisting of Common Stock,
$.01 par value) computed by reference to the closing price at which the stock
was sold on June 17, 2002 (the date of the last reported transaction) ($0.10)
was approximately $103,418.

     On June 26, 2002, there were 2,303,468 shares of Common Stock, $.01 par
value, issued and outstanding.


                                        2
<PAGE>

Item 7. Financial Statements

See Index to Financial Statements attached hereto.


<PAGE>


                                   SIGNATURES

     Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this Amendment No. 1 for
10KSB to be signed on its behalf by the undersigned, thereunto duly authorized.


                                              IEH CORPORATION

                                              By: /s/ Michael Offerman
                                                  ---------------------------
                                                  Michael Offerman, President
Dated:     July 1, 2002

     Pursuant to the requirements of the Securities Exchange Act of 1934, this
Report has been signed below by the following persons on behalf of the
Registrant and in the capacities and on the dates indicated.


/s/    Michael Offerman                                July 25, 2002
----------------------------------
Michael Offerman, Chairman of the
 Board and President

/s/  Robert Knoth                                      July 25, 2002
----------------------------------
Robert Knoth, Secretary and
 Treasurer

/s/   Murray Sennet                                    July 25, 2002
----------------------------------
Murray Sennet, Director


/s/  Robert Pittman                                    July 25, 2002
----------------------------------
Robert Pittman, Director


                                                       July 25, 2002
----------------------------------
Alan Gottlieb, Director


                                       31

<PAGE>

                                 IEH CORPORATION


FINANCIAL STATEMENTS EXHIBIT (ITEM 7)

                                    Contents

                        March 29, 2002 and March 30, 2001



   Page

   Number
   ------

Report of Independent Certified Public Accountant

Financial Statements:

Balance Sheets as of March 29, 2002 and March 30, 2001

Statement of Operations for the twelve months ended March 29, 2002
   and March 30, 2001
Statement of Stockholders' Equity as of March 29, 2002 and March 30, 2001

Statement of Cash Flows for the years ended March 29, 2002 and March 30, 2001

Notes to Financial Statements



                                       32
<PAGE>

                Report of Independent Certified Public Accountant
                -------------------------------------------------


Board of Directors
IEH Corporation
140 58th Street
Brooklyn, New York 11220

We have audited the accompanying balance sheets of IEH Corporation as of March
29, 2002 and March 30, 2001 and the related statements of operations,
stockholders' equity, and cash flows for each of the two years in the period
ended March 29, 2002 and March 30, 2001. These financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these financial statements based upon our audit.

We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of IEH Corporation as of March 29,
2002 and March 30, 2001 and the results of its operations and its cash flows for
each of the two years ended March 29, 2002 and March 30, 2001 in conformity with
generally accepted accounting principles.



                                              /s/ Jerome Rosenberg
                                              -------------------------------
                                              Jerome Rosenberg, CPA, P.C.

Melville, New York
June 17, 2002



                                       33

<PAGE>

                                 IEH CORPORATION

                                 BALANCE SHEETS

                     As of March 29, 2002 and March 30, 2001

<TABLE>
<CAPTION>

                                                                            March 29,             March 30,
                                                                              2002                   2001
                                                                            ----------            ----------

                                       ASSETS
<S>                                                                         <C>                   <C>
CURRENT ASSETS:
Cash                                                                        $    2,875            $   11,833
Accounts receivable, less allowances for doubtful accounts
   of $10,062 at March 29, 2002 and March 30, 2001                             770,884               732,150
Inventories (Note 2)                                                         1,015,539               990,420
Prepaid expenses and other current assets (Note 3)                              38,845                30,585
                                                                            ----------            ----------

          Total current assets                                               1,828,143             1,764,988
                                                                            ----------            ----------


PROPERTY, PLANT AND EQUIPMENT, less accumulated
   depreciation and amortization of $5,584,695 at March 29, 2002
   and $5,351,591 at March 30, 2001 (Note 4)                                 1,100,731             1,191,915
                                                                            ----------            ----------


OTHER ASSETS:
  Other assets                                                                  44,819                47,075
                                                                            ----------            ----------
                                                                                44,819                47,075
                                                                            ----------            ----------

Total assets                                                                $2,973,693            $3,003,978
                                                                            ==========            ==========
</TABLE>


                 See accompanying notes to financial statements

                                       34


<PAGE>

                                 IEH CORPORATION

                                 BALANCE SHEETS

                     As of March 29, 2002 and March 30, 2001


<TABLE>
<CAPTION>
                                                                          March 29,          March 30,
                                                                            2002               2001
                                                                         -----------       -----------
                                                                                            (Note 1)
                            LIABILITIES AND STOCKHOLDERS' EQUITY                             Restated
                                                                                            (Note 8)
<S>                                                                      <C>               <C>
CURRENT LIABILITIES:
Accounts receivable financing (Note 5)                                   $   676,181       $   759,937
Notes payable, equipment, current portion (Note 8)                            25,332            25,355
Notes payable, current portion (Note 7)                                           --             5,750
Loans payable, current portion (Note 9)                                       25,289            83,130
Accrued corporate income taxes                                                    --             4,912
Union health & welfare, current portion (Note 14)                             30,000            96,000
Accounts payable                                                             950,503           719,309
Other current liabilities (Note 6)                                           144,430           141,423
                                                                         -----------       -----------

          Total current liabilities                                        1,851,735         1,835,816
                                                                         -----------       -----------

LONG-TERM LIABILITIES:
Pension Plan payable (Note 11)                                               244,000           244,000
Notes payable, equipment, less current portion (Note 8)                       24,773            50,107
Union health & welfare, less current portion (Note 14)                        43,828             6,689
                                                                         -----------       -----------
          Total long-term liabilities                                        312,601           300,796
                                                                         -----------       -----------

          Total liabilities                                                2,164,336         2,136,612
                                                                         -----------       -----------

STOCKHOLDERS' EQUITY:
Common stock, $.01 par value; 10,000,000 shares authorized;
2,303,468 shares issued and outstanding at March 29, 2002
Common stock, $.50 par value; 10,000,000 shares authorized;
2,303,468 shares issued and outstanding at March 30, 2001                     23,035         1,151,734
Capital in excess of par value                                             2,744,573         1,615,874
Retained earnings (Deficit)                                               (1,958,251)       (1,900,242)
                                                                         -----------       -----------
          Total stockholders' equity                                         809,357           867,366
                                                                         -----------       -----------

          Total liabilities and stockholders' equity                     $ 2,973,693       $ 3,003,978
                                                                         ===========       ===========
</TABLE>


                 See accompanying notes to financial statements

                                       35

<PAGE>


                                 IEH CORPORATION

                             STATEMENT OF OPERATIONS

              For the Years ended March 29, 2002 and March 30, 2001

<TABLE>
<CAPTION>

                                                           March 29,          March 30,
                                                             2002               2001
                                                          -----------       -----------
<S>                                                       <C>               <C>
REVENUE, net sales (Note 15)                              $ 4,338,012       $ 4,593,840
                                                          -----------       -----------

COSTS AND EXPENSES:

  Cost of products sold                                     3,207,645         3,261,193
  Selling, general and administrative                         808,935           871,844
  Interest expense                                            143,909           154,874
  Depreciation and amortization                               244,350           275,737
                                                          -----------       -----------
                                                            4,404,839         4,563,648
                                                          -----------       -----------


OPERATING INCOME (LOSS)                                       (66,827)           30,192

OTHER INCOME                                                   10,372               734
                                                          -----------       -----------

INCOME (LOSS) BEFORE INCOME TAXES                             (56,455)           30,926

PROVISION FOR INCOME TAXES                                     (1,554)           (4,100)
                                                          -----------       -----------

NET INCOME (LOSS)                                         $   (58,009)      $    26,826
                                                          ===========       ===========

Basic and Diluted Earnings per common share (Note 1)      $      (.03)      $      .012
                                                          ===========       ===========

Weighted average number of  common shares
  outstanding (in thousands)                                    2,303             2,303
                                                          ===========       ===========
</TABLE>


                 See accompanying notes to financial statements

                                       36

<PAGE>


                                 IEH CORPORATION

                        STATEMENT OF STOCKHOLDERS' EQUITY

              For the Years Ended March 29, 2002 and March 30, 2001


<TABLE>
<CAPTION>
                                                                              Capital in        Retained
                                                                              Excess of         Earnings
                                        Common Stock                          Par Value        (Deficit)
                                        ------------------------------       -----------      -----------
                                            Shares           Amount
                                         -----------       -----------
<S>                                        <C>             <C>              <C>              <C>
Balances, March 31, 2000                   2,303,468       $ 1,151,734      $ 1,615,874      $(2,221,574)

Gain on pension plan settlements                                                                 294,506
                                         -----------       -----------      -----------      -----------
Adjusted balances at March 31, 2000        2,303,468         1,151,734        1,615,874       (1,927,068)

Net Income: Year ended
March 30, 2001                                                                                    26,826
                                         -----------       -----------      -----------      -----------

Balances, March 30, 2001                   2,303,468         1,151,734        1,615,874       (1,900,242)

Reduction in par value of common
stock                                                       (1,128,699)       1,128,699               --

Net income: year ended
March 29, 2002                                                                                   (58,009)
                                         -----------       -----------      -----------      -----------

Balances, March 29, 2002                   2,303,468       $    23,035      $ 2,744,573      $(1,958,251)

</TABLE>


                 See accompanying notes to financial statements


                                       37

<PAGE>


                                 IEH CORPORATION

                             STATEMENT OF CASH FLOWS

                           Increase (Decrease) in Cash
              For the Years Ended March 29, 2002 and March 30, 2001


<TABLE>
<CAPTION>

                                                                               Years Ended
                                                                        March 29,       March 30,
                                                                          2002            2001
                                                                        ---------       ---------

<S>                                                                     <C>             <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
  Net income (loss)                                                     $ (58,009)      $  26,826
                                                                        ---------       ---------

  Adjustments to reconcile net income to net cash used in
    operating activities

  Depreciation and amortization                                           244,350         275,737

Changes in assets and liabilities:
  (Increase) decrease in accounts receivable                              (38,734)         40,484
  (Increase) decrease inventories                                         (25,119)        (14,251)
  (Increase) decrease in prepaid expenses and other current assets         (8,260)        (14,373)
  (Increase) decrease in other assets                                       2,256            (697)

  (Decrease) increase in accounts payable                                 231,194         (60,377)
  (Decrease) increase in other current liabilities                          3,007          47,770
  Increase in accrued corporate income taxes                               (4,912)        (11,108)
  (Decrease) in due to union pension & health & welfare                   (28,861)        (30,000)
                                                                        ---------       ---------

               Total adjustments                                          374,921         233,185
                                                                        ---------       ---------

NET CASH PROVIDED BY (USED) FOR OPERATING ACTIVITIES                      316,912         260,011
                                                                        ---------       ---------

CASH FLOWS FROM INVESTING ACTIVITIES:

   Acquisition of property, plant and equipment                          (153,166)       (209,499)
                                                                        ---------       ---------

          NET CASH USED IN INVESTING ACTIVITIES                         $(153,166)      $(209,499)
                                                                        ---------       ---------
</TABLE>



                 See accompanying notes to financial statements

                                       38
<PAGE>

                                 IEH CORPORATION

                             STATEMENT OF CASH FLOWS

                          Increase (Decrease) in Cash
             For the Years Ended March 29, 2002 and March 30, 2001

<TABLE>
<CAPTION>

                                                         March 29,        March 30,
                                                           2002             2001
                                                         ---------       ---------
<S>                                                      <C>             <C>
CASH FLOWS FROM FINANCING ACTIVITIES:
Principal payments on notes payable                      $ (31,107)      $ (60,960)
Proceeds from accounts receivable financing                (83,756)         70,162
Principal payments on loan payable                         (57,841)        (51,926)
                                                         ---------       ---------

NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES       (172,704)        (42,724)
                                                         ---------       ---------

INCREASE (DECREASE) IN CASH                                 (8,958)          7,788

CASH, beginning of period                                   11,833           4,045
                                                         ---------       ---------

CASH, end of period                                      $   2,875       $  11,833
                                                         =========       =========

SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION,
cash paid during the year for:

     Interest                                            $ 134,740       $ 149,273
                                                         =========       =========

     Income Taxes                                        $   4,175       $   4,100
                                                         =========       =========
</TABLE>


                 See accompanying notes to financial statements


                                       39
<PAGE>

                                 IEH CORPORATION

                          NOTES TO FINANCIAL STATEMENTS

Note 1 -             SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:

                     Description of Business:

The Company is engaged in the design, development, manufacture and distribution
of high performance electronic printed circuit connectors and specialized
interconnection devices. Electronic connectors and interconnection devices are
used in providing electrical connections between electronic component
assemblies. The Company develops and manufactures connectors which are designed
for a variety of high technology and high performance applications, and are
primarily utilized by those users who require highly efficient and dense (the
space between connection pins with the connector) electrical connections.

The Company is continuously redesigning and adapting its connectors to meet and
keep pace with developments in the electronics industry and has, for example,
developed connectors for use with flex-circuits now being used in aerospace
programs, computers, air-borne communications systems, testing systems and other
areas. The Company also services its connectors to meet specified product
requirements.

Accounting Period:

The Company maintains an accounting period based upon a 52-53 week year which
ends on the nearest Friday in business days to March 31st. The year ended March
29, 2002 was comprised of 52 weeks and the year ended March 30, 2001 was
comprised of 53 weeks.

Revenue Recognition:

Revenues are recognized at the shipping date of the Company's products.

The Company's policy with respect to customer returns and allowances as well as
product warranty is as follows:

The Company will accept a return of defective product within one year from
shipment for repair or replacement at the Company's option. If the product is
repairable, the Company at its own cost will repair and return to the customer.
If unrepairable, the Company will either offer an allowance against payment or
will reimburse the customer for the total cost of product.

Most of the Company's products are custom ordered by customers for a specific
use. The Company provides engineering services as part of the relationship with
its customers in developing the custom product. The Company is not obligated to
provide such engineering service to its customers. The Company does not charge
separately for these services.

Inventories:

Inventories are stated at cost, on a first-in, first-out basis, which does not
exceed market value.


                                       40

<PAGE>


                                 IEH CORPORATION

                          NOTES TO FINANCIAL STATEMENTS

Note 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued):

Concentration of Credit Risk:

The Company maintains cash balances at one bank. Amounts on deposit are insured
by the Federal Deposit Insurance Corporation up to $100,000 in aggregate. There
were no uninsured balances at either March 29, 2002 or March 30, 2001.

Property, Plant and Equipment:

Property, plant and equipment is stated at cost less accumulated depreciation
and amortization. The Company provides for depreciation and amortization using
the Modified Accelerated Cost Recovery System (MACRS) method over the estimated
useful lives (5-7 years) of the related assets.

Maintenance and repair expenditures are charged to operations, and renewals and
betterments are capitalized. Items of property, plant and equipment which are
sold, retired or otherwise disposed of are removed from the asset and
accumulated depreciation or amortization account. Any gain or loss thereon is
either credited or charged to operations.

Income Taxes:

The Company follows the policy of treating investment tax credits as a reduction
in the provision for federal income tax in the year in which the credit arises
or may be utilized. Deferred income taxes arise from temporary differences
resulting from different depreciation methods used for financial and income tax
purposes. The Company has adopted Statement of Financial Accounting Standards
(SFAS) No. 109, "Accounting for Income Taxes".

Net Income Per Share:

The Company has adopted the provisions of SFAS No. 128, "Earnings Per Share",
which requires the disclosure of "basic" and "diluted" earnings (loss) per
share. Basic earnings per share is computed by dividing net income by the
weighted average number of common shares outstanding during each period. Diluted
earnings per share is similar to basic earnings per share except that the
weighted average number of common shares outstanding is increased to reflect the
dilutive effect of potential common shares, such as those issuable upon the
exercise of stock or warrants, as if they had been issued. For the years ended
March 29, 2002 and March 30, 2001, there were no items of potential dilution
that would impact on the computation of diluted earnings or loss per share.

Fair Value of Financial Instruments:

The carrying value of the Company's financial instruments, consisting of
accounts receivable, accounts payable, and borrowings, approximate their fair
value due to the relatively short maturity (three months) of these instruments.

                                       41

<PAGE>

                                 IEH CORPORATION

                          NOTES TO FINANCIAL STATEMENTS

Note 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Use of Estimates:

The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities, revenues and expenses,
and disclosure of contingent assets and liabilities at the date of the financial
statements. Actual amounts could differ from those estimates.

Impairment of Long-Lived Assets:

SFAS No. 121, "Accounting For The Impairment of Long-Lived Assets To Be Disposed
Of", requires that long-lived assets and certain identifiable intangibles to be
held and used by an entity be reviewed for impairment whenever events or changes
in circumstances indicate that the carrying amount of an asset may not be
recoverable. The Company has adopted SFAS No. 121. There were no long-lived
asset impairments recognized by the Company for the years ended March 29, 2002
and March 30, 2001.

Reporting Comprehensive Income:

The Company has adopted the provisions of SFAS No. 130, "Reporting Comprehensive
Income". This statement established standards for reporting and display of
comprehensive income and its components (revenues, expenses, gains and losses)
in an entity's financial statements. This Statement requires an entity to
classify items of other comprehensive income by their nature in a financial
statement and display the accumulated balance of other comprehensive income
separately from retained earnings and additional paid-in capital in the equity
section of a statement of financial position. There were no material items of
comprehensive income to report for the years ended March 29, 2002 and March 30,
2001.

Segment Information:

The Company has adopted the provisions of SFAS No. 131, "Disclosures About
Segment of An Enterprise and Related Information." This Statement requires
public enterprises to report financial and descriptive information about its
reportable operating segments and establishes standards for related disclosures
about product and services, geographic areas, and major customers. The adoption
of SFAS No. 131 did not affect the Company's presentation of its results of
operations or financial position.

Effect of New Accounting Pronouncements:

In December 1999, the Securities and Exchange Commission issued Staff Accounting
Bulletin No. 101 ("SAB No. 101"), Revenue Recognition in Financial Statements,
which summarizes certain of the staff's views on revenue recognition. The
Company's revenue recognition policies are in accordance with SAB No. 101.


                                       42
<PAGE>

                                 IEH CORPORATION

                          NOTES TO FINANCIAL STATEMENTS

Note 2 - INVENTORIES:

                     Inventories are comprised of the following:


                                         March 29,       March 30,
                                           2002            2001
                                        ----------      ----------

      Raw materials                     $  675,446      $  714,634
      Work in progress                     228,912         159,741
      Finished goods                       111,181         116,045
                                        ----------      ----------

                                        $1,015,539      $  990,420
                                        ==========      ==========

Note 3 - PREPAID EXPENSES AND OTHER CURRENT ASSETS:

Prepaid expenses and other current assets are comprised of the following:


                                             March 29,   March 30,
                                              2002         2001
                                             -------      -------

      Prepaid insurance                      $32,574       $18,571
      Prepaid corporate taxes                  3,925         3,640
      Other current assets                     2,346         8,374
                                             -------       -------
                                             $38,845       $30,585
                                             =======       =======


Note 4 - PROPERTY, PLANT AND EQUIPMENT:

                  Property, plant and equipment are as follows:


                                         March 29,       March 30,
                                           2002            2001
                                        ----------      ----------
      Computers                         $  189,288      $  187,248
      Leasehold improvements               585,831         585,831
      Machinery and equipment            4,175,282       4,050,066
      Tools and dies                     1,580,217       1,554,307
      Furniture and fixture                154,808         154,808
      Transportation equipment                  --          11,246
                                        ----------      ----------
                                         6,685,426       6,543,506

Less:  accumulated
       depreciation and amortization     5,584,695       5,351,591
                                        ----------      ----------

                                        $1,100,731      $1,191,915
                                        ==========      ==========


                                       43

<PAGE>

Note 5 - ACCOUNTS RECEIVABLE FINANCING:

The Company entered into an accounts receivable financing agreement whereby it
can borrow up to eighty percent of its eligible receivables (as defined in the
agreement) at an interest rate of 2 1/2 % above The Chase Manhattan Bank's
publicly announced rate 4.75% at March 29, 2002, with a maximum of 12% per
annum. The agreement has an initial term of one year and will automatically
renew for successive one year terms, unless terminated by the Company or Lender
upon receiving sixty days prior notice. The loan is secured by the Company's
accounts receivable and inventories.

Note 6 - OTHER CURRENT LIABILITIES:

Other current liabilities are comprised of the following:


                                         March 29,        March 30,
                                           2002             2001
                                         --------         --------

Payroll and vacation accruals            $ 67,920         $ 66,448
Sales commissions                          14,339           10,611
Other                                      62,171           64,364
                                         --------         --------

                                         $144,430         $141,423
                                         ========         ========

Note 7 - NOTES PAYABLE:

The Company was in arrears in the amount of $236,000 to the Apple Industrial
Development Corp. formerly New York City Economic Development Corporation
("NYCEDC") for rent due for its offices and manufacturing facilities. In May
1997, the Company and the NYCEDC negotiated an agreement for the Company to pay
off its indebtedness over a 48 month period, by the Company issuing notes
payable to NYCEDC. The note bore interest at the rate of 8.25% per annum. The
Company had repaid this note in full in April, 2001.


                                       44
<PAGE>

                                 IEH CORPORATION

                          NOTES TO FINANCIAL STATEMENTS

Note 8 - NOTES PAYABLE EQUIPMENT:

The Company financed the acquisition of new computer equipment and software with
notes payable. The notes are payable over a sixty month period. The balance
remaining at March 29, 2002 amounted to $50,105.

               Aggregate future principal payments are as follows:


         Fiscal Year Ending March:
         2003                                        $  25,332
         2004                                           16,978
         2005                                            6,745
         2006                                            1,050
         ----                                       ----------
                                                    $   50,105
                                                    ==========

Note 9 - LOAN PAYABLE:

     On July 22, 1992, the Company obtained a loan of $435,000 from the New York
State Urban Development Corporation ("UDC"), collateralized by machinery and
equipment. The loan is payable over ten years, with interest rates progressively
increasing from 4% to 8% per annum.

The balance remaining at March 29, 2002 was $25,289.

Aggregate future principal payments are as follows:


      Fiscal Year Ending March 31
      2003:                                         $   25,289
                                                    ==========

In April 1997, the Company was informed by the UDC that the loan was sold and
conveyed to WAMCO XXIV, Ltd. All the terms and conditions of the loan remained
in effect.

As of March 29, 2002, the Company had failed to meet one of the financial
covenants of the loan agreement; namely that the "Company shall be obligated to
maintain a tangible net worth of not less than $1,300,000 and the Company shall
be obligated to maintain a ratio of current assets to current liabilities of 1.1
to 1.0.

The Company reported tangible net worth of $809,357. The ratio of current assets
to current liabilities was .99 to 1.0.

The Company has applied for additional waivers of this covenant. Neither the UDC
or WAMCO XXIV has acted on these requests. There are no assurances that the
Company will receive any additional waivers of this covenant. Should the Company
not receive any additional waivers, then it will be deemed to be in default of
this loan obligation and the loan plus interest will become due and payable,
accordingly the entire balance has been classified as a current liability in the
accompanying balance sheet.


                                       45

<PAGE>

                                 IEH CORPORATION

                          NOTES TO FINANCIAL STATEMENTS

Note 10 - INCOME TAXES:

The components of the deferred tax assets and liabilities are as follows:

<TABLE>
<CAPTION>

                                                         March 29,         March 30,
                                                           2002              2001
                                                        -----------       -----------
<S>                                                     <C>               <C>
Deferred tax assets:

Net operating loss carryforwards                        $ 2,085,929       $ 2,112,755
                                                        -----------       -----------

Gross deferred assets tax assets                          2,085,929         2,112,755

Deferred tax liabilities:

State income taxes                                          (82,397)          (83,557)
                                                        -----------       -----------

Net deferred tax assets before valuation allowance        2,003,532         2,029,198

Valuation allowance                                      (2,003,532)       (2,029,198)
                                                        -----------       -----------

Net deferred tax assets                                 $         0       $         0
                                                        ===========       ===========
</TABLE>

At March 31, 2000 , the Company established a 100% valuation allowance for the
net deferred tax assets, as management could not determine that it was more
likely than not that the deferred tax assets could be realized. The change in
valuation allowance amounted to $25,666 for the year ended March 29, 2002.

As of March 29, 2002, the Company has available Federal net operating loss
carryforwards (NOL's) totaling approximately $2,085,929 which expire at various
times through March 31, 2010, for State and Local purposes, the company has
available NOL's approximating $2,019,544 which expire at various times through
March 31, 2010.

Utilization of the NOL's may be limited pursuant to Internal Revenue Code
Section 382 should significant changes to the existing ownership of the Company
occur.


                                       46
<PAGE>

                                 IEH CORPORATION

                          NOTES TO FINANCIAL STATEMENTS

Note 10 -            INCOME TAXES: (continued)

A reconciliation of income taxes computed at the Federal statutory rate as
compared to income tax expense at the effective income tax is as follows:


                                                 March 29,        March 30,
                                                   2002             2001
                                                ----------       ----------

Federal statutory income tax (benefit) rate       (34.0)%          (34.0) %

State tax benefit, net of Federal liability       (12.2)%          (12.2) %

Net change in valuation allowance                   46.2%            46.2 %

Effective income tax (benefit) rate                ( - )%           ( - ) %


Note 11 - PENSION PLAN-SALARIED PERSONNEL:

On June 30, 1995, the Company applied to the Pension Benefit Guaranty
Corporation ("PBGC") to have the PBGC assume all of the Company's
responsibilities and liabilities under its Salaried Pension Plan. On April 26,
1996, the PBGC determined that the Salaried Pension Plan did not have sufficient
assets available to pay benefits which were and are currently due under the
terms of the Plan.

The PBGC further determined that pursuant to the provisions of the Employment
Retirement Income Security Act of 1974, as amended ("ERISA"), that the Plan must
be terminated in order to protect the interests of the Plan's participants.
Accordingly, the PBGC proceeded pursuant to ERISA to have the Plan terminated
and the PBGC appointed as statutory trustee, and to have July 31, 1995
established as the Plan's termination date.

The Company and the PBGC negotiated a settlement on the entire matter and on
July 2, 2001, an agreement was reached whereby the Company's liability to the
PBGC was reduced to $244,000. The Company will make monthly payments to the PBGC
as follows:


      September 1, 2003 to August 1, 2004            $2,000 per month
      September 1, 2004 to August 1, 2006            $3,000 per month
      September 1, 2006 to August 1, 2007            $4,000 per month

In addition, to the above referenced monthly payments, the Company will make
balloon payments of $25,000 each on the following dates:


      January 1, 2004
      May 1, 2004
      May 1, 2005
      January 1, 2006


                                       47
<PAGE>

The Company will also grant the PBGC a lien on the Company's machinery and
equipment, subject to the pre- existing liens in favor of the UDC.



                                 IEH CORPORATION

                          NOTES TO FINANCIAL STATEMENTS

Note 11 - PENSION PLAN-SALARIED PERSONNEL (continued)

As a result of this agreement the amount due the PBGC has been restated to
$244,000 and is reported as a long term liability. The resultant gain of
$294,506 was reclassified and accounted for as a charge to opening retained
earnings as follows:


Opening retained earnings-March 31, 2000                  $(2,221,574)
Gain on pension plan settlement                               294,506
                                                          -----------

Adjusted opening retained earnings March 31, 2000          (1,927,068)

Net income for the year ended March 30, 2001                   26,826
                                                          -----------
Adjusted retained earnings balance at March 30, 2001       (1,900,242)

Net loss for the Year ended March 29, 2002                    (58,009)
                                                          -----------

Balance at March 29, 2002                                  (1,958,251)
                                                          ===========

Note 12 - CHANGES IN STOCKHOLDERS' EQUITY:

Retained earnings (deficit) increased by $58,009, which represents the loss for
the year.

The Company's shareholders voted on September 21, 2001 to change the par value
of the Company's common stock from $.50 par value per share to $.01 par value
per share.

As a result of the above change the Company reduced the book value of it's
common stock and increased capital in excess of par as follows:


                               Par Value                          Par Value
                                 $.50            Change              $.01
                              -----------      -----------       -----------
Common Stock                  $ 1,151,734      $(1,128,699)      $    23,035
Capital in excess of par        1,615,874        1,128,699         2,744,573
                              -----------      -----------       -----------
Total equity                  $ 2,767,608      $         0       $ 2,767,608
                              ===========      ===========       ===========


Note 13- 2001 EMPLOYEE STOCK OPTION PLAN:


                                       48
<PAGE>

On September 21, 2001 the Company's shareholders approved the adoption of the
Company's 2001 Employees Stock Option Plan to provide for the grant of options
to purchase up to 750,000 shares of the Company's common stock to all employees,
including senior management.

Options granted to employees under this plan may be designated as options which
qualify for incentive stock option treatment under Section 422A of the Internal
Revenue Code, or options which do not so qualify.


                                 IEH CORPORATION

                          NOTES TO FINANCIAL STATEMENTS

Note 13- 2001 EMPLOYEE STOCK OPTION PLAN (continued)


Under this plan, the exercise price of an option designated as an Incentive
Stock Option shall not be less than the fair market value of the Company's
common stock on the day the option is granted. In the event an option designated
as an incentive stock option is granted to a ten percent (10%) shareholder, such
exercise price shall be at least 110 Percent (110%) of the fair market value or
the Company's common stock and the option must not be exercisable after the
expiration of five years from the day of the grant.

Exercise prices of non incentive stock options may be less than the fair market
value of the Company's common stock.

The aggregate fair market value of shares subject to options granted to a
participant(s), which are designated as incentive stock options, and which
become exercisable in any calendar year, shall not exceed $100,000. As of March
29, 2002 no options had been granted under the plan.

Note 14 - COMMITMENTS:

The Company exercised its option to renew its lease on the premises for 10
years. The original lease ran through August 23, 2001.

The Company is obligated under this renewal through August 23, 2011, at minimum
annual rentals as follows:


                    Fiscal year ending March:

                    2003                          $111,600
                    2004                           111,600
                    2005                           111,600
                    2006                           111,600
                    2007                           111,600
                    2008                           111,600
                    2009                           111,600
                    2010                           111,600
                    2011                            74,400
                                                  --------

                                                  $967,200
                                                  ========


                                       49
<PAGE>

The rental expense for the year ended March 29, 2002 for this lease was
$111,482.

The terms of the renewal are presently being negotiated by the Company and its
landlord, Apple Industrial Development, Corp.

(See Note 7 - Notes Payable relating to rent arrears agreement)

The Company has a collective bargaining multi-employer pension plan with the
United Auto Workers of America, Local 259. Contributions are made in accordance
with a negotiated labor contract and are based on the number of covered
employees employed per month. With the passage of the Multi-Employer Pension
Plan

                                       50

<PAGE>

                                 IEH CORPORATION

                          NOTES TO FINANCIAL STATEMENTS

Note 14 - COMMITMENTS (continued)

Amendments Act of 1990 (The "Act"), the Company may become subject to
liabilities in excess of contributions made under the collective bargaining
agreement. Generally, these liabilities are contingent upon the termination,
withdrawal, or partial withdrawal from the Plan.

The Company has not taken any action to terminate, withdraw or partially
withdraw from the Plan nor does it intend to do so in the future. Under the Act,
liabilities would be based upon the Company's proportional share of the Plan's
unfunded vested benefits which is currently not available. The amount of
accumulated benefits and net assets of such Plan also is not currently available
to the Company. The total contributions charged to operations under this pension
plan were $38,384 for the year ended March 29, 2002 and $35,707 for the year
ended March 30, 2001.


As of March 29, 2002, the Company reported arrears with respect to its
contributions to the Union's health and welfare plan. The amount due the health
and welfare plan was $73,828.

The total amount due of $73,828 is reported on the accompanying balance sheet as
follows: $30,000 as a current liability and $43,828 as a long term liability.

In December 1993, the Company and Local 259 entered into a verbal agreement
whereby the Company would satisfy this debt by the following payment schedule:

The sum of $2,500 will be paid by the Company each month in satisfaction of the
current arrears until this total debt has been paid. Under this agreement, the
projected payment schedule for arrears will satisfy the total debt in 30 months.


Note 15 - REVENUES FROM MAJOR CUSTOMERS:

In the fiscal year ended March 29, 2002, approximately 17% of the Company's
total revenues were earned from one customer. Total sales to this customer were
approximately $730,000. No other customer accounted for over 10% of the
Company's sales. Accounts receivable as of March 29, 2002, included a receivable
from one customer which amounted to 10% or more of the total accounts
receivable.


                                       51